US equities sit in an interesting spot: published research is broadly constructive on the longer-term AI story but flags real near-term turbulence in tech.
The bull case from most strategists rests on AI capex. One widely-circulated view describes the chip and AI cycle as "third inning, one out," with demand running 12-15x supply and at least 1.5-2 years of buildout ahead. Researchers in this camp see mega-cap flows supporting an S&P 500 year-end target near 7,800, with market leadership eventually broadening beyond the largest tech names.
The caution comes from two threads. One points to FOMO and leverage amplifying correction risk in tech. Another ties the recent sell-off to rising rate expectations lifting financing costs for debt-heavy AI infrastructure builders.
A contrarian structural take argues the chipmakers selling AI will eventually underperform the companies adopting AI, as margins compress and investors reward productivity gains over capex.
Sector positioning across the published research skews pro-cyclical: constructive on Financials, Energy, Industrials and Defense; cautious on Utilities and Staples.